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Sales AMD Epyc CPUs to increase in third quarter, but data center market is declining
With the new ZEN2 architecture coming up AMD enters an exciting time. AMD's Epyc server and data center CPUs both in sales and share compared to Intel are to increase in Q3 this year. The new generation of chips based on the Rome architecture produced at 7nm, of course, will be responsible for that AMD's CEO Su already acknowledged that global data center sales in the first half of 2019 are rather weak.
Albeit Digitimes does not explain specifically as to why, they do mention that the server market, in general, is not doing so well at the moment, and that might have an effect on AMD's sales negatively impacting it.
In the first quarter of 2019, Intel cloud computing business group's revenues slipped 6.3% on year, while those coming from enterprises and governments even dropped as much as 21%. As suppliers for the cloud computing datacenter segment are still clearing their inventory, and US-China trade tensions have created uncertainties, demand for datacenter servers has been decreasing since early 2019 and may cause Intel's datacenter business group to suffer its first on-year revenue decline in 10 years in 2019. In addition to Intel, Nvidia, Xilinx and Texas Instruments (TI) are also conservative about demand for cloud computing servers in 2019. Nvidia has seen decreased sales for two consecutive quarters for its GPU products for cloud computing servers and expects weakening demand to last into mid 2019. Nvidia's order visibility is currently still weak. The US sanctions against Huawei has also undermined the server revenues of Intel and Nvidia as both have been major suppliers of the China-based company. China reportedly plans to boycott products from US-based chip suppliers including Intel. China has contributed around a quarter of Intel datacenter business group's revenues.
AMD Rome - 32c/64t Epyc processor for the datacenter
waltc3
Senior Member
Posts: 1210
Joined: 2014-07-22
Senior Member
Posts: 1210
Joined: 2014-07-22
#5677372 Posted on: 06/06/2019 05:15 PM
In my humble opinion, the US has been in a trade war with China for well over the last two decades, and the US has been losing. On average, the US has lost an average of $500B a year to the Chinese in trade deficits. Prior to this year, China was leveraging an average of ~10% tariffs on US-made goods sold in their markets, while we put on on tariffs of ~4% on their goods sold in our markets. The present US administration has asked the Chinese government for something very simple and very easy to do: drop its tariffs on US goods, and the US would drop its tariffs on Chinese goods sold in our markets in return. (We have also invited the EU to do likewise.) We have also asked China to work diligently to buy more American-made goods so as to eliminate the current trade deficits--which are wholly unsatisfactory. China has thus far declined both invitations. In addition, China has been asked to rectify its current IP policies with regard to appropriating US IP without licensing or payment--practices which have been going on for decades, too. In response, the US has put on much stiffer tariffs until such time as China wants to talk about equalizing these trade imbalances and IP issues. Most of the US media has been asleep in terms of covering this issue, and scant attention was given this matter by previous US administrations, likely because no previous US Presidents had backgrounds in finance and trade. (Obama, for instance, once likened knowledge of economics and trade to be a "magic wand," quote, unquote.) The present US administration is the first administration to actively address these issues--as well as many others.
I'm not sure, however, how much Intel can blame the China situation for its woes--as Intel problems with production and insecure architectures are well known. nVidia's GPU woes are also easy to understand in an other-than-China context. nVidia has concentrated on the high end and put out non-competitive products on the low end in the < $300 GPU markets--which are the high-volume markets. Server and data markets are very much the high end, lower volume markets, and of course with regard to AMD such buyers are poised to see just what the next-gen EPYCs will bring to the table, imo.
In my humble opinion, the US has been in a trade war with China for well over the last two decades, and the US has been losing. On average, the US has lost an average of $500B a year to the Chinese in trade deficits. Prior to this year, China was leveraging an average of ~10% tariffs on US-made goods sold in their markets, while we put on on tariffs of ~4% on their goods sold in our markets. The present US administration has asked the Chinese government for something very simple and very easy to do: drop its tariffs on US goods, and the US would drop its tariffs on Chinese goods sold in our markets in return. (We have also invited the EU to do likewise.) We have also asked China to work diligently to buy more American-made goods so as to eliminate the current trade deficits--which are wholly unsatisfactory. China has thus far declined both invitations. In addition, China has been asked to rectify its current IP policies with regard to appropriating US IP without licensing or payment--practices which have been going on for decades, too. In response, the US has put on much stiffer tariffs until such time as China wants to talk about equalizing these trade imbalances and IP issues. Most of the US media has been asleep in terms of covering this issue, and scant attention was given this matter by previous US administrations, likely because no previous US Presidents had backgrounds in finance and trade. (Obama, for instance, once likened knowledge of economics and trade to be a "magic wand," quote, unquote.) The present US administration is the first administration to actively address these issues--as well as many others.
I'm not sure, however, how much Intel can blame the China situation for its woes--as Intel problems with production and insecure architectures are well known. nVidia's GPU woes are also easy to understand in an other-than-China context. nVidia has concentrated on the high end and put out non-competitive products on the low end in the < $300 GPU markets--which are the high-volume markets. Server and data markets are very much the high end, lower volume markets, and of course with regard to AMD such buyers are poised to see just what the next-gen EPYCs will bring to the table, imo.
Clouseau
Senior Member
Posts: 2665
Joined: 2011-05-17
Senior Member
Posts: 2665
Joined: 2011-05-17
#5677381 Posted on: 06/06/2019 05:39 PM
US based companies are to blame as well. How does a company sell their stock holders a bill of goods that by allowing 25% of your sales are to an unfriendly foreign country without telegraphing the risks involved. So Intel has no one to blame but themselves. Risk mitigation is part of doing business with foreign powers. If they did not have a plan for this scenario they deserve all that is to unfold. A CFO's primary task is to safeguard company assets. Plain and simple. So blaming China for their IP theft should be focused on why the corporation's CFO's policies were so ill equipped. Fault ultimately lies within the US and we are the whiny child saying it is not our fault even though we allowed it to happen. The current trade policies are not so much to punish those foreign powers but to wake up US based corporations that they need to step up their game. But instead it is a lot easier to point fingers and blame the government for hurting the business. An ill informed public is the best tool on your side when there already is an untrusting nature towards government already instilled.
US based companies are to blame as well. How does a company sell their stock holders a bill of goods that by allowing 25% of your sales are to an unfriendly foreign country without telegraphing the risks involved. So Intel has no one to blame but themselves. Risk mitigation is part of doing business with foreign powers. If they did not have a plan for this scenario they deserve all that is to unfold. A CFO's primary task is to safeguard company assets. Plain and simple. So blaming China for their IP theft should be focused on why the corporation's CFO's policies were so ill equipped. Fault ultimately lies within the US and we are the whiny child saying it is not our fault even though we allowed it to happen. The current trade policies are not so much to punish those foreign powers but to wake up US based corporations that they need to step up their game. But instead it is a lot easier to point fingers and blame the government for hurting the business. An ill informed public is the best tool on your side when there already is an untrusting nature towards government already instilled.
JamesSneed
Senior Member
Posts: 1127
Joined: 2017-02-14
Senior Member
Posts: 1127
Joined: 2017-02-14
#5677388 Posted on: 06/06/2019 05:58 PM
I do wonder if they are miscounting the fact that server sales are declining as companies hold on upgrades until EPYC on Zen2 is released? Sure you have to add capacity if needed but you certainly can hold on upgrade cycles for a few months. I highly suspect this is part of the case and that AMD is going to be better off than this is alluding. Some of these analyst I think are trying to get AMD stock to dip so they can buy in lower.
I do wonder if they are miscounting the fact that server sales are declining as companies hold on upgrades until EPYC on Zen2 is released? Sure you have to add capacity if needed but you certainly can hold on upgrade cycles for a few months. I highly suspect this is part of the case and that AMD is going to be better off than this is alluding. Some of these analyst I think are trying to get AMD stock to dip so they can buy in lower.
Srsbsns
Senior Member
Posts: 174
Joined: 2015-01-28
Senior Member
Posts: 174
Joined: 2015-01-28
#5677390 Posted on: 06/06/2019 06:01 PM
Years and years of Intel and Microsoft just milking it. No wonder people are running to AWS.
Years and years of Intel and Microsoft just milking it. No wonder people are running to AWS.
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Junior Member
Posts: 7
Joined: 2018-07-10
If sales decline for whatever reason, you target market share. AMD is poised to gain market share, which still puts them at an advantage over Intel. This means that AMD will lose sales, but gain market share (less impact to revenue), while Intel will lose both sales and market share (greater impact to revenue).
My company had to do this in 2008 because of a global recession...AMD is having to do this because of stupid China and their IP theft practices.